Stanbic Recovers From Loss To Post A Profit For Year Ended 2020
Stanbic Bank has posted an inflation-adjusted profit after tax of ZWL1.1 billion for the year ended 31 December 2020, recovering from a ZW$44 million loss in the prior year.
The Standard Bank subsidiary posted a ZW$ 3.1 billion profit for the year under review in historical cost terms, exceeding the comparative period performance of ZW$477 million.
In a statement accompanying the results, Stanbic’s Chairman, Gregory Sebborn, said the Bank ended the year with a qualifying core capital of ZWL3.8 billion up from the 2019 figure of ZW$651.2 million, well ahead of the regulatory minimum of ZW$25 million.
The leading financial services institution has remained ahead of the 2021 minimum capital threshold which is the local currency equivalent of USD30 million.
Sebborn bemoaned the adverse effects COVID-19 had on the economy particularly during the lockdown periods. Sebborn said:
The outlook for 2021 remains grim on account of the resurgence in the number of COVID-19 infections. Sustenance of the positive developments achieved in the second half of 2020 will be hugely dependent on the impact of COVID-19 in the outlook and potential Government interventions to control any adverse developments.
The GDP growth rate of 7.4% projected by Government for 2021 could be at risk if the impact of COVID-19 on economic performance is not significantly mitigated through the availability of a sustainable and affordable vaccine.
In an accompanying statement, Stanbic Bank Chief Executive (CE), Solomon Nyanhongo said inflation-adjusted net interest income declined by 18% from ZW$2 billion in 2019 to ZW$1.7 billion, despite the strong growth in the bank’s gross lending book from an inflation-adjusted balance of ZW$4.3 billion to ZW$9 billion as demand for local currency funding continued to increase in line with growing working capital requirements.
Nyanhongo said lending rates remained subdued during the year and could not match the 14% average month on month inflation on account of market and regulatory constraints and, in turn, contributed to the receding interest income. Said Nyanhongo:
The Bank recorded a 53% increase in its net fee and commission income, growing from ZW$1.7 billion in 2019 to ZW$2.6 billion.
The improvement in our fee and commission income was largely underpinned by the impact of the rapid depreciation of the local currency against the USD on our foreign denominated commission income.
The bank remains resolute and dedicated to its five strategic pillars, with Client Centricity being the bedrock.
